Child Trust Fund: How to Support Your Child in Claiming Their Funds

As a parent of a young adult aged 18-22, you may be aware that your child could have a forgotten Child Trust Fund waiting for them. With an average value of £2,200, this tax-free savings account is a valuable asset that can help your child on their journey towards financial independence.

Understanding Child Trust Funds

Child Trust Funds were established by the government for children born between 1 September 2002 and 2 January 2011. Each account was initially funded with a £250 voucher, and additional contributions could be made by family and friends. The funds are held in a long-term, tax-free account until the child turns 18, at which point they can access the money.

Steps to Help Your Child Locate Their Child Trust Fund

If your child is unsure about their Child Trust Fund or has lost track of it, you can assist them in locating the account by following these steps:

• Use the HMRC Online Tool: Visit the UK website and use the “Find a Child Trust Fund” tool. Your child will need their National Insurance number and date of birth to access the information.
• Contact the Child Trust Fund Provider: If you know who the provider is, reach out to them directly for assistance in accessing the account.
• Avoid Third-Party Agents: Be cautious of companies that charge fees to locate Child Trust Funds. These services can take a significant portion of your child's savings, and using HMRC's free tool is a more effective option.

What Your Child Can Do with Their Child Trust Fund

Once your child has located their Child Trust Fund, they will have several options for managing their money:

• Leave the Funds in the Account: The money can continue to grow tax-free until they are ready to use it.
• Transfer to Another Savings Account or Investment: They can move their funds into a new savings account or investment portfolio that aligns with their financial goals.
• Withdraw Funds: If they need immediate cash for specific purposes, such as education or starting a business, they can withdraw part or all of their savings.

Supporting Your Child’s Financial Journey

As your child transitions into adulthood, managing finances can be overwhelming. By helping them claim their Child Trust Fund and make informed decisions about its use, you are providing essential support as they embark on this important journey towards financial independence.

For more information about Child Trust Funds, tax and family estate planning, our Ward Williams advisers are on hand to help you, please contact us on 01932 830664 or email enquiries@wardwilliams.co.uk.